Dive Brief:
- Reuters reported the Dow and S&P ended Monday at record highs, in part due to the unexpected dip in the National Association of Home Builders/Wells Fargo Housing Market Index released earlier in the day.
- Industry experts point to the disappointing results as another sign the housing market recovery is floundering, and investors hope that struggle will delay the Federal Reserve's impending interest rate hike.
- The two-point decline in builder confidence — from 56 in April to 54 in May — defied predictions, but didn't dip below the threshold of 50, comparing the number of builders who are optimistic about the coming months to those who are not.
Dive Insight:
The Fed is considering the first interest rate hike in over seven years to get back to "normal levels" — between an estimated 3.5% and 4%. For the housing industry, a rate increase could lead to a dip in the number of potential homebuyers planning to apply for mortgages.
Economists are keeping an eye on housing data this week. An unexpectedly steep increase in April housing starts offered a more optimistic take on the future of the market, contrasting with the NAHB report.
Data on mortgage applications will be announced Wednesday, and existing home sales numbers will be released Thursday.
